Add some radiation to the mix..(they no doubt tried this as well) tweak a few genes...add a few hundred more eyes to a yellow jacket with a thorax/abdo combination the size of a cigar with some neurotoxins from Monsanto for repeated injections....

Except they're not experimenting with growing giant insects, they're experimenting with what happens with insects in high oxygen atomospheres. By the sound of it, if the treacheal tubes decrease in size with the increase of oxygen, those insects are ill-suited to life on Earth as it currently is, thus, they're extinct.